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Tuesday, June 16, 2015

Shall we call him the Solar Pope?

Now that Pope Francis has advanced the status of the global warming skeptic beyond that of denier and all the way to heretic it might be good to reflect upon the last time the Catholic Church entered the realm of political economy. It was a disaster and any attempt at adherence to the medieval Church's prohibition against the charging of interest would be impossible in the modern world. Without interest how would Barack Obama finance his expenditures at the EPA or Aubrey McClendon his next gas well?
How did the medieval papacy borrow money? It cheated on the prohibition by allowing Jewish bankers to operate and do the dirty business of money lending and then taxing the lenders. Prior to the rise of modern capitalism the term usury referred not to the charging of an excessive rate of interest but the charging of any rate of interest.
The charging of interest has been has been a contentious subject for some 4,000 years. It was first addressed in the Old Testament.
Deuteronomy 23:19: Thou shalt not lend upon usury to thy brother; usury of money, usury of victuals, usury of any thing that is lent upon usury.
Jewish bankers had no moral problem with usury because they read it in context with the following verse.
Deuteronomy 23:20: Unto a stranger thou mayest lend upon usury; but unto thy brother thou shalt not lend upon usury: that the LORD thy God may bless thee in all that thou settest thine hand to in the land whither thou goest to possess it.
It's very simple brother no, other yes.
Lest you imagine that this was just a Jewish-Christian concern the subject of usury was addressed in the Babylonian Code of Hammurabi and the Twelve Tables of the Roman Law. The Church reached its position through tortured the Aristotelian logic of the Schoolmen, eschewing a literal translation of the Bible. But how does one raise the capital to finance a caravan to China to bring silk and spices to Europe's landed gentry? Hire a good lawyer? Yes, exactly. The German Jewish House of Fugger, probably Europe's largest banker at the time, hired none other than Jon Eck the man who debated Martin Luther at Leipzig and a doctor of canon law to make the case for the triple contract theory wherein lender is paid something for the use of his money but it's not called interest. (Luther, who saw the world through the eyes of a peasant mystic would have had none of that. It was John Calvin and the industrial revolution that made lending money for interest acceptable.)
A case can be made the for Church's position then and it was made by John Maynard Keynes in his General Theory
I was brought up to believe that the attitude of the Medieval Church to the rate of interest was inherently absurd, and that the subtle discussions aimed at distinguishing the return on money-loans from the return to active investment were merely Jesuitical attempts to find a practical escape from a foolish theory. But I now read these discussions as an honest intellectual effort to keep separate what the classical theory has inextricably confused together, namely, the rate of interest and the marginal efficiency of capital. For it now seems clear that the disquisitions of the schoolmen were directed towards the elucidation of a formula which should allow the schedule of the marginal efficiency of capital to be high, whilst using rule and custom and the moral law to keep down the rate of interest.
But the point is a case cannot be made for it today. In the days of Martin Luther virtually the entire population of Europe was one bad harvest away from starvation.  Or in Keynesian terms, today the marginal efficiency of capital is sufficiently high and the charging of interest is imperative to direct capital to the most efficient (and profitable) uses. Industrialization, not economic theory nor religious dogma, changed the rules of the game.
Enter Pope Francis who, when in my kindest and most temperate disposition I would compare to Luther as viewing the world through the eyes of a peasant mystic. The trouble he will find himself in is when he gets beyond nations and demands that individuals sacrifice. We could ask if his trip to the United States is necessary considering the damage it will do the environment. Could he not just upload his encyclical to Scribd and link to it on Twitter? Demanding national sacrifice is nothing more than a damned platitude. Nations do not sacrifice; individuals do. Asking as a newly confirmed heretic, why is His Holiness entitled to fly the Atlantic in a private jet and I am not? If we are speaking in moral absolutes the pope should live the life of a Trappist monk before he demands everyone save the plant. Like it or not we are industrialized and we cannot go back to medieval Europe with its balmy climate. The conveniently ignored temperature data from that era meshes well with the historical facts that the Vikings colonized and farmed Greenland and Scotland had vineyards but never mind Michael Mann can explain that.
Let's reflect again on the Middle Ages and a practice called simony, the buying or selling of indulgences or other spiritual things, not very different from Al Gore's carbon credits. Will His Holiness demand that the owners of the 1700 private jets that flew to Davos to discuss global warming repent and fly commercial if at all? Should he demand that Nancy Pelosi take Amtrak all the way to San Francisco? Of course the wealthy and the privileged won't sacrifice they'll be given or will be able to buy carbon credits from the UN or indulgences from the Vatican. Suppose everyone is issued so many non-transferable carbon credits / indulgences at birth. Spend them wisely and they will last a lifetime but indulge in frivolities and you can sit in your house in the dark. That would be harsh but fair.
Where does the principle of equality come from? Not from the Greeks, not from Marx, certainly not from the Romans. It's a Christian value. If Jesus Christ died for all men then all men are equal not just those who can buy carbon credits. If it's a sin for you, it's a sin for Al Gore, Barack Obama, Pope Francis and even Donald Trump.
Will Francis be known throughout history as the Solar Pope?


At least he gets this right. Carbon credits are secular simony.


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